Millennials Are Missing Out on The Stock Market

Should Millennials Be Investing in The Stock Market?

Read Time: 8 mins

Questions about the stock market seem to be at an all-time high. What will the markets do? Is it too late to invest and earn money? How much should I invest? How do I invest if I am in my 20’s or early 30’s?

While questions remain, there is no doubt that these issues are keeping millennials and many others from investing. A recent poll showed that 80% of millennials are not investing in the market. The survey stated that 40% of millennials didn’t have enough money, 34% said they didn’t know how to start investing, and 13% said they didn’t want to invest because of their student loans.

This article will address these broad questions so you can be more informed about your options when it comes to investing.

Before we jump into discussing some of the major questions about investing, I want to share a quick story with you. One of my first jobs out of college was working at a bank. I was in branch manager training, and so I would meet with large accounts to make sure they were happy with their our services and over time I would get to know these individuals. One of the things that I quickly found was that everyone with a $1 million-plus bank account status had invested their money at one point in time.

How did I know this? Well because I asked. You see at that time I was very curious about how people built up wealth. So, I would only ask, “I know this is a little off topic and if you don't feel comfortable answering this question I totally understand, but I see that you have a lot of money in your account, how did you build up to it to that point? I’m just looking for some pointers for a broke recent college grad?”

Again, it sounds a little weird that I would ask them on that, but I worked with these people, and I would see them on a weekly basis, and I had a relationship with them, so they didn't mind sharing how they had so much money. In fact, they loved sharing about those things with me.

I didn't really like working at the bank. It wasn't fun. I moved on to other things, but I did learn a few key things about money.

People that were in a good place financially did two things. They lived below their means, and they put their money in accounts that earned them money.

The questions you need to ask yourself are: Do I want to retire someday? What will I do to get to a place financially so I can retire?

Let’s address some of the major questions about investing.

What is investing?

Let’s start with the basics. Investing is when you take your money and invest it in a vehicle (stock, bond, real estate) with the goal of earning money. If the company or the market expands and grow positively, your money will make a certain percentage of interest or capital gains (AKA money).

Warren Buffett defines investing as “… the process of laying out money now to receive more money in the future.”

There are many places you can invest. The goal is to find a place to put your money that you can make some money over time rather than stashing it under your mattress.

Should Millennials be investing in the stock market?

Yes. The stock market is more available than ever before for people that don’t have a ton of money or know much about stock market investing.

The reality is, none of us can work our entire lives provide the money that we need to live. Social Security benefits are no longer a reliable means to earn an income by the time the Millennials retire so we must begin thinking of new options. This means that prioritizing retirement needs to be on your radar now. If you don't want to work until you're 100 years old, then you need to invest or find a way to earn passive income that will provide the lifestyle that you want to live.

When should you start investing?

There is enough data to explain that the earlier you invest, the better. Instead of explaining it, take a look at the photo below.

How much money should you have to begin investing?

If you have a job and earn a stable income every month, you likely have disposable income you can invest. You just aren't doing it.

The key is to think about investing as anything else in your budget. You need a line item in your budget that you allocate money to each month towards your retirement or accounts. Automate this process as much as possible. If you can set up direct withdraw from your bank account to your investment account each month, do that. Doing this builds the habit of prioritizing investing each month.

Click here to download a list of our favorite free tools you can manage your money with today

Don't stress as much about how much you're investing each month rather focus on building the habit, even if it's $50 a month. Even setting aside a small amount of money each pay period to invest into a retirement account is better than doing nothing. The goal is to start…

Where should I invest?

The investment world can be complicated to navigate. Most investment advisory services seem unapproachable and out of touch in my opinion. Financial advisors often come off as too “salesy” and don’t appear to connect with millennials. Don’t let this turn you away. You have other options to invest on your terms.

If you've never invested a single dollar in the stock market, do not start by picking individual stocks. It's tempting to buy stocks that you are interested in, but not being informed about this process can be risky. We recommend you invest in low-cost index funds if you are just starting out. Index funds are primarily a form of passive investing. The advantage of investing in index funds is that there are low management fees. An easy way to think about index funds is to think about buying a group of stocks or an index that mimics a particular Market. Index funds are regarded as an ideal place to save money for retirement accounts such as IRA and 401k.

If you want to set up an IRA, we recommend Betterment. Betterment is an automated investment firm that is backed by decades of research that comes to an important conclusion: Over the long term, a diversified portfolio of low-cost index funds is likely to outperform a high-cost, actively managed portfolio.

There is no minimum investment at Betterment and no minimum balance. Their goal is to ensure that every investor can get started building wealth with both long-term and short-term goals.

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How to start investing?

There are many ways to beginning investing if you are not already. The best way is to take advantage of potential employer 401k programs. If your company offers this, especially if they offer a match, you want to make use of this opportunity to get a match for your money.If your employer does not offer a 401k or any investment help, you have other options to explore that are easy to get set up.Here are two excellent services that we have experience using.


Stash is an SEC registered investment adviser. When you sign up for a Stash account, you get access to over 30 different investment options and personalized guidance. To make an investment, you’ll need to connect a checking account. All it takes is $5 to make your first investment. Stash lets you buy fractional shares so you can invest what you can afford. That’s it – sign up, customize your portfolio, and boom, you’re an investor.

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Robinhood lets you buy stock for FREE! It all started with the idea that a technology-driven brokerage could operate with significantly less overhead.They cut out the fat that makes other brokerages costly — hundreds of storefront locations and manual account management and now offer free stock purchases; you just pay for the stock itself!This app is not for suited for novice investors. Unlike Acorns or Betterment, there is no ready-made portfolio designed for your needs. Robinhood is a hands-on service, aimed at people who have a grasp on buying and selling stocks.

The great thing about these apps is that they are a Kickstarter to get you going. You may not keep your money in them forever, but once you get the hang of investing, you will feel much more comfortable navigating other aspects of the industry.Don't let the complex world of investing deter you from setting up an account today and exploring one of these options.

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Should student loans hold you back from investing?

This one is tricky. There's no doubt that investing while you have a high amount of debt could be counterproductive. For example, if your Investments are not gaining at the same percentage rate that you are paying in interest for your student loans, your efforts may be better spent on getting out of debt first. This may not always be the case though; you have to consider how much debt you have, what your interest rate is, and how long it's going to take you to pay it off.

We highly recommend you pay off your student loans and any other debt as fast as possible. Creating a get out of debt plan early in your career can free you up to invest later. You also have to consider how long you have until you retire.

RELATED: Save Money On Student Loan Repayment By Refinancing

If you're within 10 to 20 years of retirement, then we highly recommend that you begin taking investing seriously. You are approaching a time in your life not having a retirement account can be highly detrimental to your long-term goals. If this is you, take some time to truly think through your strategy when it comes to retirement and make a plan to set aside money each month to reach your retirement goals.

The mistake that most Millennials make with money is that because they don't get it or they are not where they want to be, they ignore it altogether.

This is the worst thing that you can do. Not considering your long-term financial goals now will have significant impacts on your life later.

The sooner you begin thinking about money, considering your long-term goals and making a plan to get there the better off you will be.We get it; money is a touchy subject. We all hear the generic advice the sooner you invest, the better. This is true. But what is more important is getting yourself to a place that you can have disposable income to invest.

If it means getting out of debt first, make your plan to do that. If you are out of debt, then you should be investing in some long-term wealth-building account.

Take the time to research investing for yourself and make a decision that will be best for your financial future. The worst thing that you can do is ignore doing something that you know you need to do eventually.

​Are you a millennial? Are you investing? Share your thoughts and insights in a comment below!

Read Next: Save Money On Student Loan Repayment By Refinancing​

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About the Author Zack

Hi, I'm Zack. I write for FreeUp. I enjoy writing about investing, personal development, and general life hacks to improve your life. When I'm not working on the blog or running my own business, i'm probably reading something on global affairs, riding my motorcycle or struggling through a trail run in the mountains somewhere.

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